Trust Deed Fees
A Trust Deed typically lasts for three years, and you will pay a flat monthly fee. Below is an illustration showing the typical payments and fees, inclusive of VAT, based on a client owing an average of £23,000, completing the Trust Deed in 3 years and having no equity in their home:
- Monthly payments (over 36 months) £200
- Fee included in your monthly payment (over 36 months) £130
- Trustee disbursements £150
- Total repaid by individual (including fees) £7,200
- Total unsecured debt written off £15,800 (69%)
The fee is deducted from your monthly payments so makes no impact on the total you’re required to pay. The amount you pay is based on the amount you can afford after essential expenditure has been accounted for, and on the value of your assets.
Your monthly payment will be stored in a ‘creditors pot’ where your fees will be deducted before your creditors receive their payment.
Your creditors will be aware at the start of the proposal what the calculated fees are, as they are presented before the proposal is agreed. Unless a percentage of your creditor objects to the terms in the proposal, it will become protected by law.
The fee covers the Trust Deed set-up cost as well as the on-going management, such as your Relationship Manager who handles the day-to-day running and can answer any queries during the term of your Trust Deed.
It is important that you keep up on your Trust Deed repayments; failure means you’d be liable for the outstanding balance and the costs that have been acquired. You may be granted a short ‘break’ from payments, such as if you are facing unexpected costs or, if your circumstances changes, such as a drop in income, you may be able to change the Trust Deed terms (variation). Always contact your IP before if you have any problems making payments.